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In his report “The Trouble With The Amicus Deal” Dr. Loxley concludes that the Amicus deal to build and operate Samaritan Place in Saskatoon will cost taxpayers as much as $20 million more than if the government had used traditional public sector financing.

When the government announced the agreement with Amicus (a subsidiary of the Catholic Health Ministry of Saskatchewan) and the Saskatoon Health Region in the spring of 2010, it described the deal as “an innovative approach” to funding long-term care. Under the agreement, Amicus pays 100 per cent of the capital costs for the 120-bed facility and the health region pays a higher per diem rate – in addition to the operating grant – to cover the full cost of the company’s borrowing.

However Dr. Loxley, a University of Manitoba economist, identifies six reasons the Samaritan Place long-term care facility will prove far more costly over the long term. Chief among them is the much higher cost of private sector financing.

“The fact the Amicus Samaritan Place is being built through private sector borrowing means the province will pay much more for this facility than if it had been built through normal public sector financing,” he states in the report. “If spreads [in interest rates] remain… the Amicus facility will cost somewhere between $10 million to $20 million more over the 25-year mortgage.”

Loxley says there are many reasons the government should not pursue this new funding model for long-term care, but the bottom line is it is too expensive.

CUPE Saskatchewan President Tom Graham says the union commissioned Dr. Loxley to conduct a financial analysis of the Amicus agreement after Saskatchewan’s Provincial Auditor raised concerns about the deal, including the lack of transparency and the absence of any cost-benefit analysis.

Graham says Loxley’s report shows the Amicus deal is not only a costly mistake, but the wrong way to fund long-term care in Saskatchewan.